Survey: Treasury Management Systems Good, But Need Better Analytics

Financial professionals report that their treasury management systems do a good job on treasury basics but believe they need to improve in advanced analytics, according to results from a new survey.

The 2012 gtnews survey, sponsored by Reval, found that at least half of financial professionals rate their organizations’ treasury management system (TMS) as “very good” or “good”—the top ratings on a five-point scale—in the areas of transaction capture, cash management, debt management, reporting and investment management.

However, fewer than half of survey respondents rate their TMS favorably on derivatives processing, forecasting, analytics, risk management and business intelligence. Indeed, when asked which areas of functionality could bring the greatest improvement to their organization’s TMS, the largest number point to: cash flow forecasting.

These are among the key findings from the annual gtnews Treasury Management Systems Survey, conducted in August 2012. The survey received over 500 corporate-level responses.

The international survey found nearly seven in 10 organizations currently use a treasury management system, and a majority of these companies have been running one for years. Among those not using a TMS at their organization, roughly half plan to introduce one in the next 24 months.

A TMS supports the management of a treasurer’s daily duties through a set of applications that encompass bank account reconciliation to cash balance, execution of payments (e.g. for supplies, wages and taxes), liquidity distribution and reallocation, and reporting for regulatory compliance and performance assessment.

A large majority of companies in North America and Western Europe that use a TMS opt for commercially available systems, while nearly half in Asia-Pacific either build their own or use the module provided with an enterprise resource planning (ERP) system, according to survey results. A TMS typically is selected through the request for proposal (RFP) process, with implementation often occurring in one year or less. Three-quarters of systems are licensed and installed on servers instead of being delivered as software-as-a-service.

The greatest challenge to implementation, corporates say, is committing the internal resources, presumably from leanly staffed treasury functions—more so than project management and overall timing and budgeting planning.

But the greatest organizational improvement resulting from TMS, for many organizations, is increased operational efficiency. A TMS often interfaces with enterprise resource planning (ERP) systems and treasury centers/hubs and integrates with a number of solutions, including data feeds and payments as well as third-party solutions. A quarter of survey respondents cite improved process control and compliance as the greatest organizational improvement while a minority point to improved reporting/analytical intelligence for decision-making and visibility to risk exposures.

Because treasury management systems remain core to treasury operations, they have growth opportunities ahead in 2013.

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